Background: Health care associated infections are more predominant in developing countries where Hand hygiene compliance is associated with so many factors. However, these factors have not been studied so far in the study area. This study sought to determine Hand hygiene compliance and associated factors among health care providers. Methods: Institution based cross-sectional study was conducted from April to May, 2013 in Gondar University Hospital. Stratified sampling technique was used to select 405 health care providers. Standardized questionnaire and world health organization observational checklist was used to collect the data. Data was entered and analyzed by using SPSS version 20. Descriptive statistics and binary logistic regression model was used to summarize the result. Results: A total of 405 study participants were interviewed and observed with a response rate of 96.4%. Good Hand hygiene compliance of healthcare providers was found to be 16.5%. Having knowledge about hand hygiene compliance, (AOR = 3.80, 95% CI 1.60, 8.97), getting training (AOR = 2.60, 95% Cl 1.21, 5.62), the presence of individual towel/tissue paper (AOR = 1.91, 95% CI 1.03, 3.56) presence of alcohol based hand rub for Hand hygiene compliance (AOR = 6.58, 95% CI 2.67, 16.22) and knew the presence of infection prevention committees (AOR = 2.6, 95% CI 1.23, 5.37) were significantly associated with hand hygiene compliance. Conclusions: Hand hygiene compliance among health care providers in Gondar University Hospital was found to be low. It is better to give training on Hand hygiene compliance and provide Alcohol based hand rub and individual towel or tissue paper for hand hygiene compliance.